Govt begins process of cancellation of mines to pvt firms: PM

Rejecting charges of wrongdoing in coal block allocations, Prime Minister Manmohan Singh today said the government has already initiated the process of cancelling mines to companies which failed to develop them and action would be taken against "wrongdoers" if any.

"We have initiated action to cancel the allocations of allottees who did not take adequate follow-up action to commence production," Singh said in a statement in both Houses of Parliament amid uproar created by the BJP.

Singh's rebuttal came in the wake of Government auditor CAG computing that private firms gained a whopping Rs 1.86 lakh crore undue benefit from allocation of 57 coal blocks without competitive bidding between 2005 and 2009.

The Prime Minister said the parties who were alloted mines could not start production which could be "partly due to cumbersome processes involved in getting statutory clearances...."

The issue of delays in production, he said, was being addressed separately.

Contending that CAG's observations were "clearly disputable", he stressed that the CBI was also "separately investigating" the allegation of malpractices on the basis of which due action will be taken against wrongdoers, if any.

The government had earlier said that of the 57 blocks allocated, 20 fall in no go areas and only one was operational out of the remaining 37.

The CAG, in its report tabled in Parliament on August 17, had said that blocks were allocated to private firms on nomination basis instead of competitive bidding, which amounted to Rs 1.86 lakh crore loss to national exchequer.

It had named 25 companies including Essar Power, Hindalco, Tata Steel, Tata Power and Jindal Steel and Power which had got the blocks in various states.